Tax Liens in Auburn, Alabama
In Auburn, Alabama, a "lien" is a security interest placed on a piece of property, usually land or a house, to secure the payment of a debt. It generally gives a creditor the right to take ownership of any equity that exists in the property, to secure the payment of the debt. If the owner sells the property, the creditor may also be entitled to the proceeds of the sale, up to the amount owed. It can also give the holder of the lien a higher priority status, giving them an advantage over competing creditors, if the debtor files bankruptcy.
As you might have gathered, a "tax lien" is simply a lien placed on property by the IRS or Auburn, Alabama tax authorities, to collect taxes that the property-owner has failed to pay.
However, a tax lien in Auburn, Alabama will be ineffective if the debtor doesn't own any valuable property to encumber with a lien. As with any debt, the creditor can't collect if the debtor doesn't have any assets. However, a tax lien can be applied to property that the taxpayer acquires after the lien goes into effect.
Tax Lien Procedure in Auburn, Alabama
Imposing a tax lien in Auburn, Alabama is typically an uncomplicated process. Generally, the tax authorities simply have to make a determination that the taxpayer is delinquent in their taxes, and that imposing and enforcing a tax lien will actually be worth the effort.
They will then mail a document called a "notice and demand," which lets the taxpayer know that they owe money on their taxes, and that they have a certain period of time (usually 10 days) to pay what they owe.
If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Alabama have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.
However, in Auburn, Alabama, and anywhere else in America, a tax lien only lasts for 10 years, and then it automatically expires. If the IRS fails to exercise the substantial rights that it has under a tax lien within that period of time, it is assumed that they never intend to do so, and the lien will cease to exist. This ensures that valuable property is only kept out of the economy for a limited period of time.
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How Can a Auburn, Alabama Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in Alabama, you are going to have to wade through some substantial and complex legal issues.
Fortunately, Auburn, Alabama tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek competent legal advice, to ensure that your legal rights are protected.